Advice to CEOs from Other CEOs

Tag Archives: Collaboration

Situation: A small company has a parts supplier for product that they sell to their most important customer. That customer’s specs are “copy exact” on components for existing products; also, their new products are usually based on existing components. The supplier significantly raised prices on the parts supplied to the company. How you respond to a price increase from a supplier?

Advice from the CEOs:

This is an extremely sensitive situation. One solution is to not to rock the boat. The reality is that the company needs the parts, and it will take a lot of effort to replace them with parts from an alternate vendor. Just continue the relationship. Quit worrying about it and milk it for as long as it lasts.

Find out what caused the supplier to raise prices. The supplier needs to understand that to preserve the company’s margins they may have to raise prices to the final customer. This may threaten both the company’s and the supplier’s business with the customer.

Make sure that the supplier understands the company’s costs: office, salaries, equipment, maintenance, and local regulations that are unfriendly to business and difficult to deal with. Ask them to reconsider or reduce the price increase.

Assure that the supplier understands the value that the company provides and the importance of this collaboration to the business and profits and bottom lines of both companies. Leverage this value to get the price that the company needs.

Renegotiate the relationship to assure that supplier can’t go around go around the company and sell directly to the final customer.

Situation: A company wants to upgrade its presence in social media to improve client interactions. Before engaging in this exercise, they are curious as to how others are successfully using social media as part of their overall marketing and client service strategies. From your experience, how do social media change client interactions?

Advice from the CEOs:

The Web and the emergence of social media have enabled a much broader range of communication and collaboration options with clients, vendors, and others in any marketplace. In contrast to classic “push marketing” the Web and social media enable interactive marketing tailored to the individual needs, likes and dislikes of individual customers.

One of the most important changes is the opportunity for customers to post feedback and opinions about a company’s products and services. In the new reality, if you don’t have a place where customers can post feedback – both positive and negative – they’ll find somewhere else to post it.

Web 2.0 is generally defined as interactive, dynamic web sites that get updated frequently. From a consumer standpoint we think of eBay and Amazon.com. However, this also includes web-enabled collaborations between company members or company and client, for example collaborative project management.

Using cameras and built-in microphones that now usually come built-in with new monitors and laptops you can communicate less expensively and with higher quality than with traditional telecommunications. Web-enabled team meetings are virtually the same as being in the same room.

Through your web site you can provide digital video content at different levels of sophistication to potential and, with password protection, verified customers.

An underutilized resource which is truly win-win is available through local colleges and universities that can provide state-of-the-art expertise in web enabled communications through student projects in internships.

Special thanks to Dean Lane of the Office of the CIO (http://www.oocio.com) for his insight and input to this discussion.

Situation: A company has developed a disrupting technology that will allow OEMs to produce high-end circuits at a fraction of their current cost. A non-exclusive OEM partner is using this technology but doesn’t have a channel to high-end users, and the company is too small to reach these customers themselves. How do you reach high-end users?

Advice from the CEOs:

Your dilemma is having a disrupting technology in a market with a strong division between OEMs servicing the low/medium-end market and those servicing the high-end market.

Your technology collapses the division between the low/medium and the high-end markets and OEMs and proposes a full-scale technical shift.

This shift disrupts the current business models of either group of OEMs, as well as their technology development plans. This is why you are finding resistance.

Therefore, you need a channel partner that is either:

A low/medium-end OEM who is just as much a disrupter as you are – highly promising but not yet well-established – and who is capability of developing a high-end sales and marketing effort; or

A high-end OEM that knows the market but is collapsing under their current strategy and needs an entirely different solution to revive their prospects.

Your near-term task is to simply gain market capability – both manufacturing and marketing/sales – and to use this capability to gain early market acceptance.

Your investors want to see early “Blue Chip” partners, but given market realities, this may not be the wisest strategy.

If, over the next 12 months, you can begin to impact the market shares of the high-end OEMs, this is the surest way to gain their attention. Once you start to gain share, a likely outcome is that one of the high-end OEMs will buy you to lock up your IP.

Another company recently used a similar strategy entering a new market by collaborating with a high-visibility partner.

In one year, they took 30% market share from the market leader.

The next year the market leader bought them because “it was less expensive to buy you than to spend the marketing dollars that we would have had to spend to compete against you.”

Situation: While women comprise the majority of US society and business customers, they continue to be underrepresented in business and government. For girls growing up, it’s hard to be what you can’t see, so girls and young women don’t see the opportunities that business offers them. What can SMBs do to empower women?

Advice from Linda Gold:

Women contribute greatly to the business community, particularly in small and medium-sized businesses which are the principal job creators in the US. For example, in tough times, smart companies and CEOs face outward rather than retreat inward. Women are naturally more collaborative and can be better at networking and building communities of interest that can open up new opportunities. Smart CEOs will leverage this talent.

Dr. John Gray (“Men Are from Mars, Women Are from Venus”) points out that business is like a football game—it’s about getting the ball and running with it. While women know we should be given more credit for our contributions, we need to learn how to take more credit. We need to accept the credit and accolades we receive and deserve. And if a male team member takes “our ball” and runs with it, defense needs to “kick in” and recover the ball. You can only score if the ball is in your possession.

Dee Dee Myers, President Clinton’s former Press Secretary gives an example of how to gracefully take credit. When a colleague told her she had done a great job, instead of deflecting the credit, Myers simply and elegantly replied “Thank-you.”

Small and medium-sized businesses employ a significant population of women. This gives them the opportunity to raise the profile of their women employees both in the local press, at local social business events, and through social media.

The YWCA TWIN Awards – Tribute to Women and Industry – recognize women for excellence in their area of expertise, and for giving back to the community. In Silicon Valley, CEOs nominate their high-achieving executive women for this prestigious TWIN award each year.

Girls For A Change (GFC) is a national organization that empowers girls to create social change. GFC encourages young women to design, lead, fund and implement social change projects that tackle issues girls face in their own neighborhoods. The program depends on volunteer coaches – local business, professional and career women – who receive coach training and meet with girls for a 12-week period after school. By publicizing this opportunity within your company or sponsoring a GFC team, SMBs can make a significant contribution.

SMBs have a vested interest in encouraging public education to adopt more relevant curriculum and teaching methods. We are in the information age, not the industrial age. We can learn more about opportunities to offer services to and partner with local schools and educational foundations like the Silicon Valley Educational Foundation. We can also lobby for more H-1B visas.

Situation: A Silicon Valley company is considering starting a second office both to reduce costs and to diversify its geographic client base. What are best practices for starting your first remote office?

Advice from the CEOs:

Do you really need to have an office, or can your employees be virtual?

Look at your business model and what aspects of your business require an office. Within Silicon Valley, some companies have established local remote offices to enable staff to reduce commutes. These offices include full computer and audio-visual facilities so that remote office staff can participate in home office team meetings. There are an increasing number of cloud-based services that facilitate collaboration between widely distributed teams in different geographic areas. These include Go-to-Meeting, WebEx and Sococo. Can a model like this work for you? If so, then locating an office in a different region is not very different from a remote local office.

Outside of your current client base, what customer companies would you like to target?

Where are they located? Is there a significant geographic concentration of potential customers in other regions? This might tell you where you would want to put either a real or a virtual local office.

Locating an office in a location with numerous potential clients also increases the likelihood that you will find a trained and experienced local talent pool to staff your office.

Make sure that you analyze and understand your business model and what portions are exportable.

What is your culture and how much does it rely on interaction between home office and consultant staff? Avoid a situation where remote staff feel 2nd class.

The solution is to fully understand your model, and to manage both local and remote office staff through the model. Make it simple to monitor people and their activities.

Situation: Research shows that 65% of teams within companies are now geographically distributed. This is driven by both telecommuting and the desire to access the best talent, and is enabled by technology. What are the implications of distributed teams for company and project success, and how can these be addressed?

Advice from David Van Wie and Paul Brody:

Broadly, the most important challenge is that of team “presence” – the feeling of people collaborating and working together. As social beings, we are used to establishing trust and mutuality face-to-face. Trust and mutuality are more challenging when we are limited to audible communications.

Working at a distance becomes a challenge when different members of a team are on the same stage of a workflow issue and there may or may not be shared understanding of technical requirements or timelines.

Team members need to understand requirements to a “T” – across functions, technical requirements, and needed skills.

Consider the challenge of keeping team members in synch when project requirements are continually shifting, as frequently happens when new technical breakthroughs are involved and there is no preplanned predictability to the project. This challenge is exacerbated when the team is designing at light speed.

The agile design model focuses on people and talent over process and dictates a continuous ongoing meeting. In a distributed setting, the whole team is never stronger than the most remote and linked-up member.

These are the challenges that we seek to address at Sococo through our Team Space application.

Let’s look at an example of resolving a conflict based on miscommunication of information.

In this case, a young employee was tasked with drafting an email campaign around a product. Other team members were time zones away and on their own schedules. The night before campaign launch a misunderstanding developed around one of the core features of the product.

Because of the Always-On nature of Team Space, all of the team members working on the project were right there and on call to ensure a smooth product launch. When the problem arose, they were able to have a quick online meeting to share spreadsheets and analysis, understand the issue and resolve the misunderstanding on the fly. The campaign launched the following morning.

When people are in the space, you know they’re part of the team and they’re at work, ready to solve problems. They haven’t given up. Having to bring someone back into a conversation (to resolve a problem) takes more time, effort, and energy and is draining for a distributed team.

Situation: Research shows that 65% of teams within companies are now geographically distributed. This is driven by both telecommuting and the desire to access the best talent, and is enabled by technology. What are the implications of distributed teams for company and project success, and how can these be addressed?

Advice from David Van Wie and Paul Brody:

A second example of a critical challenge occurs in crisis mode – for example when a major system is down and service is impaired.

You need the right people with the right information talking real time. Those without complete information are at a loss. If they respond from emotion rather than fact, it hinders crisis resolution.

Having an avatar in Team Space yields a positive emotional response, primarily in that you then interact with other avatars instead of just names on a list. It gives you an increased feeling of presence.

This emotional investment positively correlates to increased trust, as you feel more connected to your peers.

You want an environment in which you can bring distributed people together on the fly, provide them with complete information, raise and candidly discuss issues and alternatives, and come up with a solution with all parties involved, all while reducing the emotionality of the situation.

Emotionality of tense situations is reduced because of the trust built amongst team members through our unique spatial UI.

Third, organizations beyond a certain size tend to form silos by function. This can help to build strong functional organizations, but has drawbacks when different functions have conflicting priorities.

In a distributed organization, a visual layout becomes important. You want to be able to include and intertwine all functions in a visual space, and provide access between and across functions.

This entails a philosophical shift to an open culture where teams don’t feel defensive or protective. It is facilitated by a visual space where it is easy to bring in the right expertise to resolve issues based on information.

Likewise, the underlying open structure of Team Space and its ability to promote quick conversations as well as hefty meetings helps solidify trust in a distributed group.

Situation: Research shows that 65% of teams within companies are now geographically distributed. This is driven by both telecommuting and the desire to access the best talent, and is enabled by technology. What are the implications of distributed teams for company and project success, and how can these be addressed?

Advice from David Van Wie and Paul Brody:

A fourth question which arises with distributed organizations is whether you have to have different processes to manage a distributed organization.

We don’t think so. Each company has developed their own set of process to address the challenges of distributed personnel. Rather, we focus on communication tools that adapt to clients’ existing processes by humanizing communication – enabling people to easily find each other and share information.

Fifth, some of the most challenging environments occur in organizations which span extreme time zone differences. How is this addressed?

You want an audio and visual system that lets you know who is available at a given point in time or could be made available easily. This facilitates bringing the right expertise into a conversation.

When different parts of the team are widely separated by time zone, it is important to create a more social and effective environment during the times when all team members are available. We believe that Team Space helps to create this environment.

In one company, Indian team members stay at the office until 7:00pm – thereby avoiding the worst traffic – and can be available online at home after dinner. This increases the time that they can interact with their American counterparts.

It is also important to be able to record meetings and presentations so that members who are absent can play back the meeting to stay up to date.

Our experience is that visual presentation is superior for communicating visual information, and we accommodate this.

Situation: A mid-sized Company is more than three decades old. The challenges are modernizing operations and updating company culture to keep pace with customer expectations. They also need to diversify into new growth markets. Can they change the culture of the company without losing key people?

Advice:

Let people know that you value them. Consistently express your appreciation for what they do for the company, and don’t blame them for not being perfect. For them to be willing to grow as company culture changes, they need to feel safe – to understand that a change in culture does not mean the loss of their job.

Give employees consistent face time. Ask questions and seek their solutions instead of proposing your own. Involve them through collaboration. Tolerate the fact that their solutions won’t be exactly like yours.

Pick your battles. Select what you want to change and conserve your emotional capital. Think about what’s important and what’s not before you intervene. Let minor issues slide as long as they don’t impair schedules or performance.

Maintain an open door to all levels of the company. However, when an employee comes in with an issue or complaint, defer judgment to their manager. Never undercut your managers.

Your most important strengths will be patience and understanding. Stay mindful that change can be threatening, particularly if employees find it hard to see the big picture. Keep your themes and messages simple and repeat them as often as necessary to keep everyone focused.

Situation: The Company created five customer-centered divisions headed by Business Development Managers (BDMs) who oversee project management as well as business development in their markets. A year after implementation, the BDMs are more focused on managing their teams than on developing new business. How can we enhance focus on business development?

Advice from the CEOs:

Your BDMs are technicians; business development (BD) isn’t their strength.

People gravitate toward important/urgent activities in their comfort zone.

Supplement your staff with people who have a proven talent for business development.

You may not need 5 people – 2 or 3 may be sufficient to support the BDMs.

What if our customers demand technical expertise in business development personnel?

Make category expertise a requirement when hiring, in addition to experience in BD.

There are specific traits that characterize successful BD personnel. Specify these traits in your hiring process and verify these abilities in candidates both by testing for these traits and through reference checks. The Sandler Organization has good tests for BD talent.

The BDMs are responsible for coordinating bidding and pricing. Should this responsibility be handed over to the new BD personnel?

Not completely. You have two options.

Require BD personnel to coordinate with the BDMs when it comes to pricing and project delivery, and/or

If you determine that the BD personnel need to be able to negotiate pricing on their own, tie their commission compensation 100% to margin on projects bid.